Agco initiated with a Market Perform at BMO Capital

BMO Capital initiated coverage of Agco with a Market Perform rating and $96 price target. The firm is “cautiously optimistic” on agriculture equipment margins across the cycle, but says ongoing industry contraction “seems only in the middle innings.” BMO feels the group could trade sideways, or lower, “before it is clear green shoots are developing.” It ranks Deere (DE) before CNH Industrial (CNH) and Agco (AGCO) currently, preferring scale, and Deere’s “relatively strong performance during last decade’s contraction.”